JAKARTA (Reuters) -Foreign shareholders in nickel miner Vale Indonesia are planning to sell 14% of their stake to a state company this year to bring their holding below the maximum permitted for overseas firms, mining minister Arifin Tasrif said on Friday.
Vale Canada Ltd and Sumitomo Metal Mining will sell their shares to MIND ID, Indonesia’s state mining holding company, at a price negotiated between them, he told reporters.
“In principal, Vale has agreed to divest its stake again, so that when it is finalised, they would have divested 54% of the shares. Previously they have divested 40%, now another 14%,” mining minister Arifin Tasrif said, adding that the divested share would include Sumitomo’s stake.
Shares of Vale Indonesia traded at 6,775 rupiah ($0.4468)per share on Friday on Indonesia’s stock exchange.
Under Indonesian rules, foreign miners are required to divest 51% of their stake to Indonesian buyers after a certain period of operation.
Vale Canada, a wholly owned subsidiary of Vale SA, and Sumitomo Metal Mining in 2020 sold 20% of their stake in Vale Indonesia to the state holding company, while 20% of the shares were divested trough the Indonesia stock exchange in 1990.
MIND ID said the company is waiting for government’s decision regarding the divestment, however the company hoped they would have the controlling right.
“Regarding the percentage of additional shares, without the controlling right over Vale’s strategic decision in the future, the additional shares will become less strategic,” MIND ID corporate secretary Heri Yusuf told Reuters on late Friday.
Vale Indonesia declined to comment, while Vale Canada, Sumitomo were not able to comment immediately.
($1 = 15,165.0000 rupiah)
(Reporting by Bernadette Christina MuntheWriting by Fransiska NangoyEditing by Kanupriya Kapoor & Simon Cameron-Moore)
